Harley-Davidson Is Cruising in Neutral
Harley-Davidson Inc. (NYSE:HOG) remains a work in progress, beating first-quarter earnings expectations but still pulling up the rear with its electric bike program, which is merging with AEA-Bridges Impact Corp. (NYSE:IMPX) later this year.
The Milwaukee-based motorcycle maker on Wednesday reported earnings of $1.45 per share (excluding some items), barely topping the $1.44 per share estimated by analysts. Revenue from motorcycles and related products rose to $1.5 billion, the company reported, once again barely exceeding analyst expectations of $1.3 billion. Its full-year forecast remained unchanged.
On Thursday afternoon, shares were trading at $36.86, a gain of 1.49% or 54 cents. Regardless, the GF Value Line suggests the stock is fairly valued currently based on historical ratios, past financial performance and future earnings projections.
For the first quarter, the parent company of Harley-Davidson Motor Company and Harley-Davidson Financial Services saw revenue growth of 6%, driven by global motorcycle pricing and growth across Parts & Accessories and Apparel. The operating income margin was 15.6%, which was down 2.9 points versus last year. Global pricing was able to offset cost inflation, officials said, but the margin was negatively impacted by lower shipments due to the ongoing semiconductor shortage.
As for its LiveWire bikes, sales seem to be slowing. Jalopnik's Erik Shilling reported the company sold 387 of the all-electric motorcycles last year.
Its a figure that I almost cant believe given that Harley aspires to sell tens of thousands of LiveWires, and its been out for a few years now," he wrote.
Operating income saw a decline of 27%, driven by the significant loss reserve release in 2021 and the normalization of losses in 2022 that were in line with expectations.
GAAP diluted earnings were $1.45 per share. Management repurchased $248 million worth of common stock (or 6.2 million shares) on a discretionary basis during the quarter.
"As we enter the second year of our five-year Hardwire strategic plan, we are pleased to see strong consumer demand for Harley-Davidson products across all regions, management said in a statement. Our teams continue to work through the impact of the ongoing global supply chain disruption, and despite the challenging macro environment, we are optimistic for improvements in the second half of the year."